Litigation developments: fundamental shareholder rights.
Wong Leung Revocable Tr. v. Amazon.com Inc., C.A. No. 2023-1251-BWD (Del. Ch. May 1, 2024) - In order to inspect books and records under Section 220 of the Delaware General Corporation Law, a stockholder-plaintiff must...more
PVH Polymath Venture Holdings Ltd. v. TAG Fintech Inc., C.A. No. 2023-0502-BWD (Del. Ch. Jan. 26, 2024) - Under the “bad faith” exception to the American Rule, Delaware courts will consider shifting fees when aggressive...more
2023 was a busy year, with both the Delaware courts and others, including the U.S. Supreme Court, weighing in on shareholder and M&A litigation issues. The Delaware Court of Chancery issued several notable decisions on issues...more
Section 220 demands are a commonly used tool for stockholders to gain access to a company’s books and records. Although this provision of the Delaware General Corporation Law vests stockholders with a right of access thereto,...more
After a de novo review of the record following a Magistrate in Chancery’s final report, Vice Chancellor Fioravanti of the Delaware Court of Chancery declined to accept the Magistrate’s recommendation to deny a...more
Greenlight Capital Offshore Partners, LTD., v. Brighthouse Financial Inc., C.A. No. 2022-1067-LWW (Del. Ch. Nov. 20, 2023) - Valuation is a well-established proper purpose to inspect corporate books and records. While each...more
In re Zendesk, Inc. Section 220 Litigation, C.A. No. 2023-0454-BWD (Del. Ch. Aug. 25, 2023) - The background of this books-and-records decision involved a failed acquisition, a strategic review, a proxy contest, and a...more
Joel Newman v. KKR Phorm Investors, L.P., et al. C.A. No. 2022-0310-NAC (Del. Ch. Aug. 31, 2023). At the motion to dismiss stage, Delaware courts will consider the facts alleged in the complaint as well as the documents...more
In this issue, we discuss recent Delaware court developments regarding officer liability, who can recover “lost-premium” damages, and trends in books and records actions, among other topics....more
As discussed in prior articles, stockholder plaintiffs have increasingly sought to obtain companies’ books and records under 8 Del. C. § 220 (Section 220) and the Delaware Limited Liability Company Act’s analogous provision,...more
In Lawrence B. Seidman v. Blue Foundry Bancorp, the Delaware Court of Chancery awarded US$223,651.60 in attorneys’ fees and expenses to a plaintiff stockholder because of the defendant’s “glaringly egregious litigation...more
Myers v Academy Securities, Inc. C.A. No. 2023-0241-BWD (Del. Ch. July 24, 2023). Under Section 220 of the Delaware General Corporation Law ("DGCL"), stockholders are entitled to corporate books and records if they make a...more
Hauppauge Digital, Inc. v. Rivest, C.A. No. 2019-0848 (Del. July 10, 2023). Under Delaware law, once a stockholder has established a proper purpose to inspect a corporation's books and records, the Court of Chancery has...more
Simeone v. The Walt Disney Company, C.A. No. 2022-1120-LWW (Del. Ch. June 27, 2023) - The Walt Disney Company opposed Florida legislation that limits instruction on sexual orientation and gender identity in Florida...more
Ontario Provincial Council of Carpenters’ Pension Trust Fund v. Walton, C.A. No. 2021-0827-JTL (Del. Ch. Apr. 26, 2023) - To assert a derivative claim, a stockholder plaintiff must plead demand futility. The plaintiffs...more
A books and records request is a tool used by stockholders to gather information in advance of filing a derivative lawsuit against officers and directors. These requests can also be used by activist investors to gather...more
An employee, agent or principal of an investor is often designated to serve on a company’s board of directors when that company receives an investment or acquires the investor. That board member then becomes privy to legal...more
On January 24, 2023, Skadden presented the fourth and final part of our 15th Annual Securities Litigation and Regulatory Enforcement Update series, “Developments and Trends in Delaware Law: A Review of 2022 and What to Expect...more
As we kick off 2023, we are optimistic that the healthcare private equity (PE) market will be resilient despite various headwinds. As you think ahead, please consider the issues and trends summarized below that may be helpful...more
For decades, Delaware courts have encouraged stockholders to use the “tools at hand” — before initiating lawsuits — by obtaining corporations’ books and records through 8 Del. C. § 220 (Section 220). As described in prior...more
Rivest v. Hauppauge Digital, Inc., C.A. No. 2019-0848-PWG (Del. Ch. Sept. 1, 2022) - Plaintiff stockholder sought to inspect the books and records of a defendant company, requesting a narrow universe of annual and...more
In City of Detroit Police & Fire Ret. Sys. on Behalf of NiSource, Inc. v. Hamrock, No. CV 2021-0370-KSJM, the Delaware Court of Chancery granted a motion to dismiss duty of oversight claims against an energy company’s...more
Fewer public companies are allowing insiders, including directors and officers, to hedge and/or pledge their shares. These days, insider trading policies will typically include a section covering these practices and either...more
Oklahoma Firefighters Pension & Ret. Sys. v. Amazon.com, Inc., C.A. No. 2021-0484-LLW (Del. Ch. June 1, 2022) - In reviewing the propriety of a stockholder’s Section 220 demand to inspect corporate records, Delaware courts...more
In this issue we discuss how plaintiffs are finding creative ways to obtain books and records, and appraisal cases where Delaware courts held that fair value rose between signing and closing. Other articles describe how the...more